Money inherited by a child

Crowdedhouse_2

My mother died in 2012. Her will left £10,000 to my young daughter with myself and my father being trustees. My mother stipulated in the will that my daughter could not receive the money until she was 27 (long story involving my ex husband and my mother being worried that he would try and take the money off her).


When my mother made the will I don't think that she realised just how flipping complicated it has been for me trying to get the money invested. People were telling me that I would have to get a solicitor to set up a trust and all sorts of things like this. I certainly didn't want to go this route at all and start paying out money to solicitors. And that would not have been what my mother would have wanted anyway. So to cut a long story short, for the last 2 years I have managed to invest the money in a one year fixed rate bond in one of the high street building societies. This has been problematic with them deducting tax on the interest she earned despite me filling out the R85 forms and then telling me when I complained that as a 'special favour' they would reimburse the tax! I left the money with the building society for the last 2 years, probably out of laziness but can't be bothered with them making errors any more.


The bond has matured in the last few days and I have now received a cheque from the building society. The problem is I now have to find another bank or building society to open the best account I can for her.


What I want to ask you is, is there any way that my father and myself can change the age at which my daughter receives this money. She is now 14 and I am thinking I really can't go through this hassle every year until she is 27. I expect I'll have to supply a copy of my mother's will to any new bank and my father who is now very old will be expected to open the account with me as joint trustee. He is past that stage now and really can't be bothered with the hassle of it.


Has anybody found themselves in a similar situation regarding money left to a child?

SeniorSam

When you say the you and your father are Trustees, was a Trust set up when your mother died, say from a Discretionary Trust in the Will? If not, then to be correct, a Trust should be holding the Trust fund for your daughter so that it is protected from anyone, including yourselves.

Were you and your father appointed as Executors of you mothers Will?

With your daughter being only 14, the money could be invested in a building society Trust account and most building societies could deal with this. However, they would only hold a Trust fund for a 'minor' until age 18.

If you and your father are not prepared to remain as Trustees then a professional, like a solicitor, should be appointed, but they will have their costs for setting up and administering the Trust, which could well exceed the interest that is made on the capital.

It is too late to change your mothers Will, as that could only be done within the first 2 years of her death and then by a Deed of Variation, but you probably did not seek advice from a professional following the death. Did you deal with Probate yourselves?

Therefore, it seems that it remains your responsibility to protect that capital for your daughter.

Sam

wwl

I don't know anything about trusts, but what is it that prevents you (assuming there is nobody who would object) from just ignoring the provisions in the will and giving to her earlier?

SeniorSam

wwl, how would it be if the Will of you or anyone else were ignored.
There are Laws to prevent this from happening.

wwl

SeniorSam wrote: »

wwl, how would it be if the Will of you or anyone else were ignored.
There are Laws to prevent this from happening.

Wills can be changed if all beneficiaries are in agreement. Circumstances can change.
AIUI a trust is there to protect the interests of the person for whom it is set up. What is in their best interests could easily change due to unforseen circumstances. For example what if the person needed money due to an accident or illness?

RAS

A deed of variation (what you are suggesting) must be agreed by all beneficiaries. AFAIK a child under 18 years is not considered capable of agreeing to a DOV.

And a DOV has to be agreed within 2 years of the death.

Crowdedhouse_2

Sorry for delay in replying.


SeniorSam, I must admit a lot of these terms relating to Trusts and Trustees I don't really understand.


After my mother died the only thing that was set up was that building society account. On the certificate of investment it states:


Account Holder: TTEES (my mother's name) DECD DISC WILL TRUST


Account Number:


Opening Balance:


Interest Rate:


Date of Investment:




Yes, both myself and my father were named as Executors on her will.


I will remain as Trustee but as my father is already in his mid 80s not sure how much longer he will live for. So am not sure what would happen if he dies before my daughter reaches 27.


We did all the probate ourselves.




wwl, when I initially opened the account with the building society I told them the money was for my daughter from her late grandmother. On reflection, I should have just given her the money from my own
savings and then the building society wouldn't have been any the wiser. My concern was that there might be some comeback from HMRC, as I'd had to pay some Inheritance Tax on the estate.


My mother died in September 2012 so it is nearly 3 years now.


Thank you both for your replies.

G6JNS

It is an offense not to carry out the terms of the will.

TBagpuss

It my be worth taking some advice from a solicitor - not necessarily to get them to administer the trust but to advise about whether it is possible to change it, and what you can, and can't do.

It should normally be possible to substitute a new trustee instead of your father if he no longer wants to be involved

A lot will depend on how the trust is worded - once your daughter is 18 it may be possible to bring the trust to an end.

wwl

At 18 could the daughter be made a trustee?

G6JNS

wwl wrote: »

At 18 could the daughter be made a trustee?

It depends on the terms of the trust. It would not alter the need to wait until she is 27 to get the money unless the trust has some provision to allow it for it to be spent for educational purposes.